Under pressure from banks, Moody's Investors Service said Friday that it is delaying until early May its highly anticipated decision on whether to downgrade the credit ratings of 114 banks in 16 European countries... It had planned to start unveiling the decisions this week.


The looming downgrades have ignited a scramble among some lenders and investors who fear the development could fan the smoldering crisis.


Many bankers and outside experts hoped the sector--battered by losses on bad loans and investments in risky European government bonds--had turned the corner when the European Central Bank recently dished out roughly €1 trillion of inexpensive, three-year loans to at least 800 banks. Those loans largely eliminated the risk that a bank would abruptly collapse due to liquidity problems.

But the benefits provided by those loans has started to fade. Across Europe, bank shares have been pounded by renewed concerns about Europe's financial health--a rout that continued Friday with a steep selloff in Spanish and Italian banks.

Comments: Be the first to add a comment

add a comment | go to forum thread